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Trafigura to sell, Anvil to wrap up strategic review this year

TORONTO (miningweekly.com) – Democratic Republic of Congo copper producer Anvil Mining on Friday said 39% shareholder Trafigura wanted to sell its stake, putting to rest earlier speculation that the trading house was planning a takeover.

The move sparked a strategic review of the Toronto-listed company’s options, and CEO Darryll Castle said the process was likely to reach closure by the end of the year.

“I do find it disruptive internally and we are trying to fast track the process, and I definitely want to move into the new year with this behind us,” he said on a conference call.

While Castle declined to say whether Anvil had signed any confidentiality agreements with interested companies, he did reveal that “there are several things going on at the same time”.

The company has appointed BMO Capital to advise it on the strategic review, first announced on August 4.

According to Castle, Trafigura told Anvil that it considered its stake in the company, acquired through a $200-million debt and equity deal in August 2009, as noncore, and wanted to exit it.

He said that a number of companies that were interested in buying the 39% shareholding had approached the Switzerland-based trading house.

“My sense is that they are approached at regular intervals regarding their stake in Anvil. I don’t think that one came along that was better than any other, so I don’t think it [the decision to sell] was precipitated by a single offer,” commented Castle.

“To some extent, yes, it was a surprise to us. Though, being rational, there was a view that they were going to sell anyway.”

Last week, an unnamed analyst told Mining Weekly Online that he thought Trafigura was looking to buy all the shares of Anvil.

“At the end of the day, a lot of people think that's a way for them to start building a mining arm,” he said.

Trafigura, based in Switzerland, is the world’s second-biggest independent trader in nonferrous concentrates.

KINSEVERE ON BUDGET

Meanwhile, Castle said that the $400-million Kinsevere Stage 2 expansion, set to produce 60 000 t/y of copper cathode, was on budget, with commissioning set to occur this quarter and full production in the last quarter.

Anvil produced 5 999 t of copper during the three months ended June, generating revenues of $10.4-million, which was nearly one-third lower than the same period last year.

This translated into a less-than-$1-million loss for the quarter, as the company shut down the old heavy media separation plant at Kinsevere to focus on the commissioning of the new solvent extraction electrowinning plant.

Anvil reported a $15-million profit in the second quarter of 2010.

The company’s stock rose 1.6% in Toronto, to trade at $6.15 apiece in the early morning.

By: Reuters
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